Memo from the CFO: Strategies to Survive Budget Meetings

CIO — Reader ROI
Learn what works in budget presentationsn Understand what CFOs are looking for in project proposals
See what can hurt a project’s chances for approval

Scene I: The boardroom of GiantGeopolis, where a budget-finalizing meeting has just begun. n Dan, the CIO, stands to give his proposed budget presentation. He’s wearing khakis, a white shirt, a striped tie and comfortable brown shoes. His confidence is almost palpable as he sets up his flip charts and passes schematic diagrams around the table. He launches into a wonderfully detailed explanation that ties increased network bandwidth requirements with telecommunications infrastructure. Half an hour later the budget for his proposed infrastructure and new projects has been unceremoniously slashed. He sits down quietly. n Scene II: The boardroom of HugeWorld Corp., where a similar budget meeting has started. n Matthew, the CIO, stands. He’s wearing khakis, a blue shirt, a flowered tie and brown loafers. Instead of setting up flip charts, he passes around a one-sheet summary of his budget figures to those around the table. Fifteen minutes later, Matthew’s proposed budget, almost identical to Dan’s, has been approved down to the penny. n Where did Dan go wrong? And what’s Matthew’s secret to success? The flowered tie? It has to be the shoes, right? n What Matthew really has going for him is an insight as to what his CFO and CEO want in this kind of meeting.

He learned how to talk about how the company’s IT strategy fits into its business strategy, how to clarify what the return is on infrastructure investments, how to prepare the other business leaders for his pitch and how not to overwhelm his audience with details. And Matthew sounds like a CFO’s dream because he actually is just that—he’s the model CIO whom CFOs would build if they could pour their wishes into his creation. To find out everything Matthew knows, comb through the prescriptions used to build him—and learn how to prepare budgets and project plans that will win the CFO’s stamp of approval.

Say It Out Loud and Say
It in Writing

Start with a plan. It sounds simple, but CFOs really want to know that their technology compatriots have a guiding vision when they’re asking for project and budget funding. A recent survey taken by Financial Executives International (FEI)—a Morristown, N.J.-based professional association for senior financial executives—shows that CFOs are often left in the dark when it comes to IT plans. "Less than half of the companies we polled have no written strategic plans for IT and that includes a significant number of companies with sales of $5 billion or more. That’s a major hurdle in managing IT effectively, particularly in large enterprises," says Dewey Norton, a member of FEI’s Committee on Finance and Information Technology and the vice president of finance at Ricon Corp., a Panorama City, Calif.-based maker of accessibility products for the disabled. If the CIO doesn’t have a written plan and can’t clearly explain what that plan is, then the finance folks will wonder whether they’re being asked to throw money willy-nilly at one new idea after another.

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